Mar­ket should func­tion nat­u­rally: min­is­ter

While ris­ing com­modi­ties prices present a ma­jor prob­lem, the gov­ern­ment should re­frain from ex­er­cis­ing price con­trol mech­a­nisms, the min­is­ter for com­merce said.

THE gov­ern­ment should avoid ex­er­cis­ing price con­trol mech­a­nisms on ba­sic com­modi­ties, says the min­is­ter for com­merce, de­spite the fact that ris­ing prices present a ma­jor prob­lem for many around the coun­try.

Union Min­is­ter for Com­merce U Than Myint urged yes­ter­day that the mar­ket should be al­lowed to func­tion nat­u­rally, de­spite the in­fla­tion that has be­set the econ­omy in the past year or so.

His state­ment fol­lowed a ques­tion from Bago Re­gion MP Daw Khin Hnin Thit (NLD; Padaung) about whether or not there is a gov­ern­ment plan to keep a lid on ba­sic com­mod­ity prices.

U Than Myint said the min­istry is keep­ing a watch­ful eye on prices, work­ing in co­op­er­a­tion with mer­chant as­so­ci­a­tions and whole­sale cen­tres to com­pile daily com­mod­ity prices around the coun­try.

He says mar­ket con­trols mean a sup­ply chain can’t func­tion prop­erly, and can tend to­ward the de­vel­op­ment of black mar­kets. The gov­ern­ment should look to ex­am­ples of eco­nomic poli­cies de­ployed suc­cess­fully in other coun­tries as a means for pro­vid­ing long-term sup­port for the man­u­fac­tur­ing and trade sec­tors, he said.

The min­is­ter noted com­mod­ity prices are not surg­ing, but the prices of some goods are fluc­tu­at­ing nat­u­rally off the back of de­mand and sup­ply.

“Un­der our eval­u­a­tion, there are no dra­matic fluc­tu­a­tions,” he said.

The min­istry doesn’t con­trol com­mod­ity prices di­rectly but it has al­lowed im­port of some goods that are also pro­duced do­mes­ti­cally, when nec­es­sary.

“For ex­am­ple, we have al­lowed im­port­ing of green peas and white shrimp,” he said.

The de­vel­op­ment of the agri­cul­tural and live­stock in­dus­try should be safe­guarded by tax con­ces­sions on fer­tilis­ers, in­sec­ti­cides, equip­ment and spare parts, he said. Raw ma­te­ri­als for an­i­mal food and phar­ma­ceu­ti­cals used in the pro­duc­tion process are also ex­empt from com­mer­cial tax, he said.

MP Daw Khin Hnin Thit ob­served that the fall­ing value of the kyat has left many strug­gling – a fact that has been im­per­vi­ous to po­lit­i­cal shifts.

“The grad­ual rise in com­mod­ity prices is a ma­jor chal­lenge for peo­ple un­der the new gov­ern­ment. The pre­vi­ous gov­ern­ment couldn’t fix this prob­lem ei­ther. We found no drops in prices, but they con­tin­ued ris­ing af­ter the new gov­ern­ment took of­fice,” she said.

Daw Khin Hnin Thit said that the in­come for ru­ral pro­duc­ers is not in step with the price of their goods once they hit the mar­ket – some­thing she be­lieves ex­plains the dif­fi­culty Myan­mar has had when it comes to im­prov­ing liv­ing stan­dards among the gen­eral pop­u­la­tion.

“For the min­i­mum wage, peo­ple get only K3600 per day. The low­est salary for em­ploy­ees is only K120,000 a month. They are the ma­jor­ity in the coun­try,” she said.

Daw Khin Hnin Thit per­sisted, say­ing she was not sat­is­fied with re­sponse from the com­merce min­is­ter.

Speaker U Win Myint stepped in, say­ing that the min­is­ter could opt to an­swer her ques­tion at a later date. The min­is­ter took up the of­fer, say­ing he would for­mu­late a more com­pre­hen­sive an­swer and pro­vide it in a writ­ten let­ter.

Myan­mar’s in­fla­tion was 2.82 per­cent in 2011-12, then climbed in 201213 to 2.85pc. In 2013-14 it rose to 5.7pc, in­creas­ing again in 2014-15 to 5.9pc. In 2015-16, it hit 11.44pc.

Things have shifted some­what, the Union min­is­ter ob­served, with in­fla­tion fig­ures for Novem­ber 2016 at 8.26pc.

He in­di­cated that Myan­mar’s on­go­ing in­fla­tion woes are down to a num­ber of key fac­tors, in­clud­ing the in­creased amount of cur­rency raised dur­ing the last two years.

Ex­ports have de­creased due to crop dam­age from flood­ing, and the price of nat­u­ral gas has fallen. The mar­ket has also had to con­tend with in­creased trans­porta­tion charges, wages and ser­vice ex­penses, he said. Mar­ket spec­u­la­tion plays a driv­ing role.

“Com­mod­ity prices have risen due to in­creas­ing de­mand, and the de­mand has in­creased due to ru­mours and ex­pec­ta­tions of the pub­lic,” he said.